Should You Remain Bullish on Bitcoin?

It had been consecutive green candles for the past few months, with Bitcoin hitting an all-time high of over $100,000. While the spike in Bitcoin seemed too good to be true, analysts and crypto fund traders had long speculated about the bull run. But now, the candles are dropping!

Should we hold onto our hopes that Bitcoin will rise to new highs in 2025?

Let’s find out!

What drove Bitcoin to its all-time high in 2024?

Certain indicators fueled speculations about the rise of Bitcoin, starting with the demand for Bitcoin ETFs in early January 2024.

The U.S. Securities and Exchange Commission (SEC) approved the Bitcoin exchange-traded funds (ETFs), which is a major milestone in adding cryptocurrencies to mainstream investment institutions.

Since 2019, passive funds such as the S&P 500 and VTI have outperformed actively managed funds and gained popularity due to their simplicity and cost-effectiveness. The addition of Bitcoin ETFs to these funds will broaden Bitcoin’s exposure within the existing investment structure. With Bitcoin as a stepping stone, there is a projection that other cryptocurrencies will follow suit.

The approval of Bitcoin ETFs has led to significant inflows from institutional investors, with net inflows exceeding $35 billion. This demand for Bitcoin ETFs is expected to improve market liquidity and stability. There are also hopes that Bitcoin ETFs will be included in institutional investment portfolios, including 401(k) plans and pension funds. Financial institutions like BlackRock have already introduced Bitcoin ETFs and this development can potentially increase the adoption and rise of Bitcoin.

The halving of new Bitcoin issuance in 2024 has also led to a spike in Bitcoin prices. Bitcoin halving occurs every four years and increases scarcity, potentially driving up prices, hence the bull run—which we are currently experiencing in 2024. As part of Bitcoin’s monetary policy to limit the capped supply of Bitcoin to 21 million coins, Bitcoin halving was introduced in 2012.

Bitcoin halving is a periodic event that happens every four years (or after 210,000 blocks are mined), where the reward for miners successfully mining a block is halved.

The outcomes of the U.S. presidential election—with the successful re-election of Trump—undoubtedly contributed to the spike in Bitcoin prices. During the 2024 Bitcoin Conference, Sen. Cynthia Lummis proposed that the U.S. government should buy 1 million bitcoins for a "strategic Bitcoin reserve" over the next four years, and President Trump expressed his support for this, stating that it would help strengthen the U.S. economy, similar to the federal petroleum reserve. Trump’s government had shown interest in the crypto markets, and investors believe that his re-election would support and facilitate the U.S. adoption of Bitcoin as a strategic reserve.

Now, the issue of the adoption of Bitcoin as a reserve is still a matter of debate. However, the outcome of this regulatory policy is bound to change the position of the crypto markets. Analysts like Bitwise speculated that Bitcoin could attain $200,000, potentially reaching $500,000 if the U.S. government adopts a strategic Bitcoin reserve.

As these indicators have pointed to a promising future for Bitcoin, analysts advised investors and traders to remain vigilant and aware of the market’s volatility and associated risks.

Will Bitcoin Rise or Fall in 2025?

Currently, the price of Bitcoin has dropped to a whopping $95,137.67. There are thousands of speculations as to whether Bitcoin will rise or drop in 2025. The Federal Reserve’s latest projections to cut interest rates in 2025 sounded warning bells for the crypto market. Yet, with a growing market and the adoption of regulatory policies, Bitcoin could be positioned for new highs in 2025. Investors should consider that certain macroeconomic factors can lead to the potential rise or fall of Bitcoin.

There is a lot of volatility in the Bitcoin market; any significant price swing at the moment can cause a potential decline. However, amidst this, analyst VanEck still projects Bitcoin reaching $180,000 despite the significant volatility. Institutions like Standard Chartered also share a positive outlook for the future of Bitcoin.

Conclusion

The optimism in Bitcoin's trajectory for 2025 should be backed with caution. The market is highly volatile, and there will be both profits and losses—it all depends on how we choose to tread. 2025 is the time to ensure proper risk management. Let’s see what the future holds for Bitcoin!